I have been told by a few clients of mine that they won’t consider certain condos or developments because there are no “rental guarantees.” I’ve told them anybody that says they can guarantee you a rental return on any property is full of it. There are too many variables involved that can prevent your property from being rented out. Some of these agents and developers are using these statements of guaranteed rents to entice buyers into buying. Don’t fall for this!
It got so bad in the UK that the FSA (U.S. equivalent to the Consumer Advocacy Bureau), is trying to crack down on these operations. The developers promote buying a condo in a development and then allow the owners to put their unit into a rental pool for income to be shared between the owners and the management company. This scenario by itself isn’t a problem. It becomes an issue of abuse when the agents/developers promote a GUARANTEED return when investing in the condo and rental pool group.
Nothing in life is guaranteed except taxes and death! Please be cautious when any agent or developer guarantees returns.
The full article can be read at the Global Edge Overseas Property website. In order to read, you might have to set up a free account.
Warmest Regards,
Rob